Senators call for limits on insurance premium subsidies

Sens. Coburn (R-Okla.) and Durbin (D-Ill.) have called for a $40,000 payment limit to be imposed on crop insurance premium subsidies.
In support of their position, the senators noted the increase in crop insurance premium subsidies in recent years, due in part to higher insurance liabilities that have resulted from higher crop prices.

National Cotton Council | May 14, 2012

In a letter to Senate Agriculture Committee Chairwoman Stabenow (D-Mich.) and Ranking Member Roberts (R-Kan.), Sens. Coburn (R-Okla.) and Durbin (D-Ill.) have called for a $40,000 payment limit to be imposed on crop insurance premium subsidies.

The letter cites a recent report by the Government Accountability Office, which was originally requested by Sen. Coburn, that outlined possible savings of up to $1 billion a year on crop insurance if Congress capped the subsidies for the premiums paid by farmers and USDA took more aggressive steps to monitor for fraud and abuse in the program.

In support of their position, the senators noted the increase in crop insurance premium subsidies in recent years, due in part to higher insurance liabilities that have resulted from higher crop prices. The letter also raised the issue of an across-the-board reduction in premium subsidies by noting a recent analysis by the Congressional Budget Office.

The National Sustainable Agriculture Coalition also weighed in with their analysis of the payment limit and eligibility changes in the Senate Agriculture, Nutrition & Forestry Committee’s farm bill package. While noting the changes in commodity payment limits, means tests and eligibility requirements, the Coalition’s summary noted that the package contained no limits on insurance.

Despite the significant reforms included in the Senate Agriculture Committee’s package, it is expected that some in Congress will advocate further restrictions as the farm bill process moves forward. The NCC will continue to be actively involved in the debate and voice opposition to any efforts to further restrict or deny program eligibility based on size or income.